Rabobank rate riggers see bigger crooks than themselves

Raman said the department is still investigating individuals, who weren’t charged in yesterday’s actions.

The documents also show how specific submissions made on certain days by Rabobank influenced global interest rates by two to three basis points.

One Rabobank trader told a yen submitter that people were talking with each other to change the rates. The submitter said: “yes deffinite manipulation - always is tho to be honest mate … i always used to ask if anyone needed a favour and vise versa … a little unethical but always helps to have friends in mrkt.”

On July 28, 2006, a Rabobank trader and rate submitter discussed moving one-month rates higher. Within 20 minutes, the submitter contacted a trader at another bank and said: “morning skipper will be setting an obscenely high lm again today,” according to the U.S. filing.

The rate submissions by both Rabobank and the other bank, which isn’t named in the documents, moved up one basis point that day, from 0.37 to 0.38. Those submissions were the second highest of the contributor panel that day, according to the statement of facts.

Rabobank, based in Utrecht, was fined by the U.S. Commodity Futures Trading Commission, the Justice Department, the U.K. Financial Conduct Authority and the Dutch public prosecutor’s office, the regulators said in statements yesterday. The fine brings the total settlements in the rate-rigging probe to $3.7 billion.

Rabobank entered into an agreement with the Justice Department to accept responsibility for manipulation of Libor and Euribor, the U.S. said. As part of that agreement, a wire fraud charge was filed against Rabobank which will be dismissed after two years as long as the bank cooperates with the terms of the deal.

Agreement Accepted

During a short hearing yesterday in Hartford, U.S. District Judge Alvin Thompson accepted the agreement, under which Rabobank waived an indictment and entered a not guilty plea to the fraud charge under a deferred-prosecution agreement.

Alexander Berlin, an attorney in the Justice Department’s Fraud Section, said the charge carries a maximum fine of $1 million and, for individuals, a prison term of as long as 30 years. Andrew Sherman, Rabobank’s general counsel and managing director, signed the agreement on the bank’s behalf in open court.

Thompson scheduled a phone conference for one year from yesterday to ensure Rabobank is abiding by the terms of the deal.

The fines make Rabobank the fifth firm penalized over manipulation of the London interbank offered rate. Global investigations into banks’ attempts to manipulate the benchmarks for profit have led to fines and settlements for Barclays Plc, Royal Bank of Scotland Group Plc, UBS AG and ICAP Plc.

Thirty current and former employees of the Dutch lender were involved in rate rigging, Rabobank executive board member Sipko Schat said yesterday. Five of them were fired, he said.

“We were startled by the amounts, which were higher than we had anticipated, taking into account regulators found no involvement from the bank’s management board or senior managers,” Schat said. “Regulators also hold against us that our internal organization wasn’t set up adequately, with Libor policies lacking.”